Barron4664 12/17/24 10:57 PM Post #808129 on Fannie Mae-No Politics (FNMA) I care. Section 303(a) of the Charter Act states that FNMA may issue shares of common stock for appropriate capitol, or capitol plus surplus. A direct quote of the statute. Treasury's demand for warrants for 79.9% of common stock for free as a "commitment fee" for access to funds from Treasury under the SPSPA violates both the prohibition of fees or charges in connection with purchasing the Seniors, and violates the plain letter of the statute by not paying appropriate amounts of capitol for the 79.9% of common shares. Treasury's agency actions will be challenged under both 5 USC section 702 for declaritory relief and injuction without Chevron defference and for illegal exaction under the Little Tucker Act.
WARRANT: Fannie Mae’s common stock outstanding 1,158,087,567 diluted by the warrants at 79.9 percent = 4,603,542,119 adds a total of 5,761,629,686 shares outstanding,
Percentage Calculator in Common Phrases link below:
Steps: 1158087567 ÷ 20.1% = 5761629686.5672%
The warrants are an illegal fee. But more importantly, the warrants granted to Treasury violate the Charter Act directly, as the Charter Act statute requires that FNMA issue common shares for “appropriate” capital. The amount the Treasury will pay the companies to exercise the warrants is nowhere near appropriate capital. I’ll go so far as saying it’s stealing.
Barron Quote: “ Nothing in HERA removes or supercedes the directors duties under the safety and soundness act. Federal law requires FNMA (whether by BOD or FHFA-C) to issue shares of common stock for "appropriate capital". Full stop.” End of Quote
0.00001 purchase price per share
Illegal Warrants Treasury Common Shares 4,603,542,119 Fannie Mae (cost $46,035) 2,584,067,576 Freddie Mac (cost $25,840)
$71,876 non-substantive price Treasury payment for 79.9 % of the entire market value of Fannie Mae and Freddie Mac is not appropriate capital, it’s stealing from the shareholders.
7,187,609,695 total shares x 0.00001 = $71,876
Senior preferred 1,000 Page 143
Quote: “If the warrant is exercised, the stated value of the common stock issued will be reclassified as “Common stock” in our consolidated balance sheet. Because the warrant’s exercise price of $0.00001 per share is considered non-substantive (compared to the market price of our common stock), the warrant was evaluated based on its substance rather than its form.” End of Quote
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